In the classical view, flexible wage rates would assure
A) low inflation.
B) high rates of unemployment.
C) high secular inflation rates.
D) full employment.

Question

Quizplus · Accepted Answer

In the classical view, flexible wage rates would assure full employment. This means that if wages were allowed to adjust freely in response to changes in labor market conditions, the market would clear and there would be no unemployment.

In the Classical View, Flexible Wage Rates Would Assure